Apple’s second quarter 2003 market share rises; diversification into music promising

Apple Computer boosted its worldwide market share from 2.0 percent in the first quarter of 2003 to 2.3 percent in the second quarter, although slightly down from 2.7 percent a year ago.

“Apple’s quarter ‘wasn’t as good as other top vendors, but they just announced new products,’ IDC analyst Loren Loverde said of Apple’s market share drop. ‘Apple sales tend to respond to new products.’ Loverde noted that Apple recently announced the Power Mac G5, which will start shipping in August and could boost sales,” reports Ina Fried for CNET

“Although unit sales were down, there were bright spots in Apple’s earnings report. The company last quarter had its highest revenue level in nearly three years by selling higher-priced machines, as well as more of its iPod music players. The iTunes Music Store offers another potential boost to the Mac maker,” Fried writes.

“The expansion into the music business could help offset relatively flat PC sales, but it isn’t clear how much benefit the company will get from selling music downloads. The company did say its iTunes Music Store was nearly at the break-even point, with 5 million tracks sold by the end of last quarter. The company expects to sell far more songs once it has a Windows version of iTunes available later this year,” writes Fried. “Needham analyst Charles Wolf said in a research note this week that Apple could capture 20 percent of the U.S. pay-per-download market with its iTunes Music store. Wolf estimates that the overall U.S. online download market could reach US$2.9 billion, meaning that the Apple store could generate US$600 million in annual revenue.”

Fried reports, “As for the PC business, some analysts say it’s time to stop measuring Apple [by its] slice of the overall PC market… Apple [addresses] only part of the market, said NPD Group analyst Stephen Baker… Apple has concentrated at the high-end of the consumer market. ‘Nobody expects that you can sell Acura TSX sports cars as Taurus wagons,’ Baker said.”

Full article here.


  1. 2.3% worldwide? A number I find possible but doubtful. If 771,000 machines (desktops and laptops as announced in Apples quarterly statement) are 2.3% then last quarter over 33.5 million machines were sold worldwide. Since the second calendar quarter is usually a weak quarter for computer buying this would equate to at least 135 million desktops and laptops a year. In a year when computer vendors are whining about how poor sales are, this seems like a stretch to me.

    Anyone know of a ruputable source (NOT IDC) which can give an accurate worldwide number?

  2. Population of European Union >350 million
    Population of USA & Canada >300 Million
    Population of Japan >100 million

    Now add in Australia, Brazil, New Zealand, and the richer classes of Russia, South Africa, India etc. and you’re left with a lot of people. Some of these people won’t have computers, others will have two. I think sales of 135 million a year is roughly accurate. Whether it’s sustainable is another matter.

    The interesting thing about this article is that although Apple’s Mac sales year on year are down, if their market share is slightly increasing, it shows that everyone’s year on year sales are the same.

  3. Apple needs to offer the masses something useful like access to information currently available to Windows users only. It is appalling that Apple has continually dropped support for everyone but a few graphic designers. When people can’t do bussiness and basic web searches without a real or virtual PC, they’ll never switch to a MAC for a cool design or a few easy to use apps which will be available at a better price and with more features for windows a few months down the road. Style is nothing without substance.I’m a longtime MAC user but my next machine will be windows based if I can’t do my job and communicate with more than 2% of the population.

  4. Market share is determined by SALES. If I buy a mac and keep it for 6 years (like my last one), it only counts once. If I buy a PC and replace it every 2-3 years, it counts more – even though I pitch the old one. If you look a single “market share year”, Apple could have an average of one computer in every 5 households (I have 4) still functioning fine (20%), but because they continue to be usefull for so much longer (or are more expesnsive) in each given year Mac users won’t upgrade their hardware as often. Every time my neighbor upgrades his PC (about once a year for gaming) it counts toward more market share for PC’s while I am still using my mac from years ago.

    The same thing applies to the education market. Our district has about 90% macs to PC’s. So you could say that Apple has about 90% market share. But that’s not how the calculation works. Each year we order only about twice as many macs as PCs (Apple’s market share just dropped to 66% and PC’s market share just increased to 33%). We know that the macs will be still in the classrooms much longer and that we will have to replace the PC’s much more often (we still have labs running LC III’s – our olds PC lab runs pentium II’s).

    Last time I went to the airport and sat in the lobby there were 10 or 12 laptops out. Over half of them were Macs. The rest were a mix of other PC brands. Watch TV and movies and see what the “market share” is for Macs. (Yes, I know they are used by creative folks so there will be a disproportional number in Ads, TV and Film). My point is that you can’t assume by the 2% market share figures that mac ore only in 1 out of every 50 homes. I’ll bet the number is MUCH higher (it is around here), it’s just that people are still using their old macs and not upgrading as often.

  5. Richard, I have used a MAC. I have a number of MACs at home and I can’t access the Real Estate Multiple Listings for Delaware County, Pennsylvania without Windows and I can’t Access Autodesk or Frameworks Active Project web sites for Architects and Contractors colloboration without Windows or Virtual PC. I’m talking about conducting bussiness not watching trailors or listening to music. Even having Microsoft Office only gives me access to basic word processing and spreadsheets. Powerpoint often has inconsistancies when made on a MAC and run on Windows.

  6. nicgolato, all the problems you mentioned have nothing to do with Apple. If someone designs a website using non-standard code, that is not Apple’s fault. If Mircosoft writes crappy apps, then use Keynote or complain to Redmond, not Apple. And if you think M$ Office is the only business/productivity app available for Macs, you have been living under a rock (or a bridge, if you’re just a pesky troll). Go here to be partially enlightened:

  7. Ashami-
    I am well aware of the fact that my problems with Windows only Websites have to do with the Web Designers and not Apple specifically. I am also aware of other office apps besides Microsoft. My comment and what I beleive is the reason for Apples low market share is that using a MAC means overcoming obstacles thst windows users don’t need to do. I have tried for years to justify using a MAC and I have grown tired of having to do extra work just to be compatable with others in my field of work, Architecture and Real Estate. Finally, I do believe there is more Apple can do to work towards interoperability or at least educating the masses about how they can help achieve equal access to public information instead of thier babbling advertisements about hard to use or unreliable PC’s. Truth is most stores don’t carry MACs and most sales people, tech writers for general purpose newpapers and media constantly remind you “Not available for MAC” The problem is most people think “Windows is the only choice” and the few brave souls who venture into a MAC outlet are confronted by a Holier than thou attitude that turns most people off. Unfortuneately, most people have no idea of the virtues of a MAC because those features get lost in Apple’s excessively large ego. I work with windows all day and like to relax in front of a MAC when I get a chance. Unfortuneately, I can’t conduct my business on one irregardless of whose to blame.

  8. Everyone, what nicgolato is trying to do is called FUD…Fear, Uncertainty, and Doubt. He is doing it poorly (compared to some I have seen here). He is claiming the Mac cannot be a fully-functioning business machine (Fear: “If I buy a Mac, I can’t do work on it and my business will fail”, Uncertainty: “you mean Macs can’t even surf the web?”, Doubt: “If Macs have no business software other than Office, maybe I shouldn’t buy a Mac”). However, if you follow the link you will see that the Mac can handle any business need. More to the point, Macs DO IT BETTER than PCs. On top of that, any stray PC-only program that does not have a compatible version on Mac can be run in VPC…so that Macs CAN DO MORE than PCs.

    Do not become a victim of FUD. Macs rock, and that’s that.

  9. nicgolato, it is true that a subset of the real estate networks in the U.S. are Windows ONLY. This is most definitely not true of all of them, just some of them.

    However, you statement about architecture is definitely false. First, VectorWorks is one of the most award winning Architectural CAD pieces of software out there. It started out as Mac only. Second, teams in national and international competitions in the past decade have won using Macs (NOTE: Macs and NOT MACs [MAC stands for Media Access Controller and not short for Macintosh]) and VectorWorks. VectorWorks used to be Mac only and and used to go by the name MiniCAD. Even when it was Mac only teams using it won national and international competitions designing with it. Third, my niece is a 4th year architecture major. She never complains about using her Mac (even though now it is 4 years old and getting a bit long in the tooth) and says she never has problems dealing with many of her Windows centric cohorts (though they are not all Windows centric!).

    I design and build satellites for a living (I’m VP and CTO of an aerospace firm — have been in such a posisiton for 3 different firms since 1990). I interface with a LOT of different people and share files all the time. I get about 50-75 emails every day (not counting all the junk mail) and many of them come with attached files. I have yet to find something I can’t read in any fashion on my Mac.

    I have only found one program I need which is not available for the Mac. In reality it’s not available for Windows either. It was a great little graphicly oriented program developed in the late 80s under PC-DOS (not MS-DOS). I have not found anything better on a Mac or Windows since. So what do I do? I run it in Virtual PC on my Ti Power Book. The PC-DOS program runs fine and does 100% of what I need.

  10. “…could boost sales.”

    Could boost sales? Good gawd, come the end of August Apple will be struggling to produce enough 1.8GHz and 2GHz DP G5s to satisfy orders…

  11. Thanks for the feedback folks. I have been a MAC user since 1986 when the difference between a MAC and a PC were like day and night, literally. We used a MAC as a print spooler for our turnkey CAD System and to do all of our report writing and scheduling. Our workstations were solid wood doors on saw horses and one day a saw horse fell over, the door see-sawed and the MAC flew up in the air and fell to the ground and still worked without a glitch. At that point I knew that this was the computer for me and in terms of reliability and screen resolution, I have not been dissappointed. Over the years, as Apple’s market share dropped and our firm abandonned MACs, I held on earning myself the nickname, Newt after the Apple Newton. Although I found all of your responses interesting, most of you have missed my point. Apple needs to offer some basic tools and information to the masses if they want to increase market share. Otherwise, 98% of the population will not even know they exist let alone offer a quality alternative to the mundane. Apple has strengthened its core market area and now is the time to reach out to those it once deamed expendable. If they’re happy with 2-3% of the richest and coolest users, fine. But if Apple is serious about increasing Maarket Share, they need to offer people like me something more. Even if it is demanding interoperability from Microsoft. In my opinion, Apple trying to do an MAC only thing in response to a PC only world is not the answer.

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